Humankind evolved out of a hunter-gatherer past, using stone, fire and then metals to survive in a harsh yet sustainable environment. Although they had no concept of it, their existence was self-sustaining and energy-balanced. All physical effort was expended in catching food and basic survival, which left no energy surplus. Without energy surplus there could be no specialization, no society and no economy.

All the bright whirry things that make up our current version of civilization, and the fact that we have full bellies, pretty clothes, warm houses and the ability to defy gravity fosters the delusion that we have progressed beyond that era.

We haven’t.

We face our ‘modern’ world still under the control of the survival instincts that were honed to perfection over millennia to cope with hazards and problems that faced our ancestors in a different age. Their dangers were real and immediate, to be dealt with on the instant. They could not concern themselves with that which might happen next week or years hence. Our prehistoric forebears were too busy sourcing sufficient energy for their living day, which was locked into the bodies of dangerous animals who were unwilling to surrender it.

Thus the skill of the hunt became paramount to get sufficient energy to survive and breed. A female offered herself to the best hunter, because that gave her offspring the maximum boost to chances of survival. Crude perhaps, but the forces of nature take no account of civilized niceties.

So we are the progeny of success: they are us, and we are they. Within us we carry the mindset of our ancestors.

But nature still cares only that we survive the present, and our hunter gatherer instinct concurs; in evolutionary terms, action on a threat that is not imminent is a still a waste of precious energy, the fact that we have a surplus is taken as confirmation that we need do nothing, because there will always be more. That is why we perceive the dangers of climate change, overpopulation and energy depletion and our other potential problems as being beyond our event horizon, so the majority of us obey primitive instincts and ignore them.

We burn our fuel to sate immediate needs because we can. Supermarkets are full, fuel pumps work and light remains available at our fingertips. These are now our energy sources and our legacy instinct tells us they will always be available, so why should we disbelieve those who cry ‘hoax’?

The complacency of surplus

Despite the trappings of our consumer society, our main preoccupation is still that of procuring sufficient energy to sustain our lifestyle at its current level, and fulfill promises of growth. Oil, coal and gas enable our existence so we tear the earth apart to get more.

In the early 1800s, the industrial revolution gave an enormous boost to our survival chances as we released the unprecedented amount of energy locked in coal oil and gas. Surplus energy was bestowed on mankind as a once-only gift. And though we were not intelligent enough to see that, it allowed us to maximise our consumption at every available opportunity for the next 250 years.

The development of the heat engine gave leverage to the labour of the minority, allowing them to feed the majority.

For the first time in history much of the world’s population was freed to take employment other than that of food sourcing. Now a 500 acre farm can be run by half a dozen workers instead of 100 and deliver many times more food. This has not been due to our innate cleverness, but the burning of hydrocarbon fuels which provided cheap food surpluses to support extra people, and the means to employ those people in the context we know today: manufacturing, medicine, teaching, the arts and thousands of other professions that are now essential to the society we live in. Hydrocarbon processes also form the basis of all the tools and transport we need in our job-functions that make our living possible, together with the houses we live in.

Our dependence on oil, coal and gas is now absolute, and there are no meaningful substitutes. Windfarms and solar panels deliver electricity, but the complexity of human civilization has been built on the input of hydrocarbons. The energy output of a wind turbine and a barrel of oil is not interchangeable to the extent necessary to support any working infrastructure that would relate to the one we have.

We have enjoyed the benefits of fossil fuel energy for so long that we take it all for granted. Such complaisance has become another part of our perceived infinity. Without blind faith in that infinity of supply, our industrial infrastructure would collapse. So the legacy instinct kicks in again, allowing us to hold onto the delusion that supply really is infinite.

We must add that personal lie to the climate change hoax list.

It is more comforting to ignore modern history, even though it clearly shows that the slightest downturn of energy input in our industrial system produces a pro rata rise in unemployment.

All our employment is now dependent on the conversion of one form of energy into another. Money is the tokenization of that employment, it has no intrinsic value other than a medium of exchange. Our global economy has become a dynamic of (surplus) energy availability. Any cash you have available represents the means by which you can purchase the results of someone else’s energy output, or you can buy the source of energy itself, a farm or an oilwell if you happen to be cash-rich.

Unlike our prehistoric forebears, our hydrocarbon energy to cash exchange system has enabled us to turn our environment into a capital asset, to be traded at will to create wealth for a privileged few. Now a dozen billionaires have capital assets equal to 3.5 billion of the poorest people in the world. The odd concept has arisen that the planet is now property, owned by we who live on it. We must add that to our infinity list, because rich and poor alike are locked into the same delusion. Though for the time being, wealth for the few has meant debt for everyone else. As energy resources deplete, our planet will reassert itself, shrug off the concept of ownership and dissolve all concept of wealth.

Which brings us up to date, to explain where we are.

Billions more

When the planet was inhabited by scattered tribes numbering maybe a few million, regarding the environment as infinite presented no problems. By the measure of the time and available energy resources, it was.

250 years ago, at the start of the industrial revolution, the world supported around 1 billion people.

Now there are 7.5 billion of us, but we are still committed to a rate of consumption dictated by primeval instinct, giving us the certainty of infinity. Our political leaders say this can go on, promising infinite growth, despite the inconvenience of living on a finite planet, and having no others to colonise.

No politician who wants to hold on to office dare say otherwise, relying on an electorate being convinced that prosperity can be voted into office.

Our current rate of growth is 1.11%, a seemingly insignificant figure; but that will double our numbers in 63 years. As it is, we are set to increase to 9 or 10 billion by mid century. Maybe more. The mothers of those extra billions are alive now, with the instinct to procreate driven by the genetic forces that our ancestors had. The elderly will also insist on staying alive as long as possible.

Can we support that number in food, water and other essentials?

In the unlikely event that we can, well and good.

If we can’t, then we must face the fact that something is going to prevent it. Just what, we cannot know, but the world is already carrying an (oil fuelled) excess of maybe 5 billion, and can’t support 2 or 3 billion more. Which means that billions of people living and billions yet unborn do not have a future.

Right now about 1 billion people are at or close to starvation level, and most of those yet unborn are set to join them. When the food source for any species goes into short supply through overpopulation, nature has an inflexible and drastic remedy.

There can be no airy dismissal of the problem, that it will be solved by future generations. We are that generation; we will be witness to the events of the next 20 or 30 years. We cannot know for certain what that catastrophe is to be, but it will happen.

For a century or more the USA has been the breadbasket of the world, but that colossal food output has been entirely due to input of cheap hydrocarbon fuels, fed into Farm USA as a commercial enterprise. Few other countries are now major net exporters of critical foodstuffs, grain and meat; all rely on hydrocarbon input to support food production and when food shortages begin to bite, those nations will have no choice but to stop exports.

Estimates vary, but we are unlikely to have more than 20/30 years worth of easily accessible global oil reserves; as mid century approaches, hydrocarbon reserves will diminish and the violent struggle to get hold of it will increase, thus restricting access even more.

All world leaders of whatever persuasion are aware of the critical link between oil and food. They will have no option but to join the struggle to keep it or get hold of it. We can only guess at what that will mean in real terms, but the major wars of the last century and this one were fought over resources, specifically oil.

By 2050 the population of the USA is set to grow by nearly 150 million, up by 48% on current numbers. So the USA will barely be able to feed her own, let alone billions of the world’s starving. The nonsense of ‘Saudi America’ can be dismissed by pointing out that the USA produces 10Mbd of oil, but uses 18Mbd. That also exposes the fantasy of ‘making America great again’. The bridges, roads and tunnels promised in Trump’s acceptance speech cannot be built without cheap oil.

Compounding the food issue is the stark reality that without oil we will not be able to ship food around the globe, should there be any available.

250 years of hydrocarbon fuelburning has brought us what appears to be a new era, that of luxury and plenty and bright light. But viewed in the wider timeframe of human history the last two centuries might be seen instead as the supernova of humanity — a brief flash of light in the million years of darkness that had been our normality till around 1750.

That light has been our hydrocarbon resource exploding all at once, and probably taking us with it.

With the information gleaned from our speculative exercise in the last several posts, we can now flesh-out the remainder of our timeline of likely events with not only what will probably happen, but how people will likely react and what the consequences will be. This allows us to paint a much more nuanced picture of the future unfolding before us.

2016-2020: During this time, countries of the world try their hardest to maintain BAU conditions. There is massive application of propaganda via the media in an attempt to convince the masses that good times will continue forever, even as economic crisis accelerates. Central banks and governments continue ZIRP/NIRP policies as well as QE and direct intervention in markets to keep businesses solvent. Financial institutions begin to fail and it is possible that full scale financial collapse will be underway; however, this may also drag on for longer than 4 years.

In response to debt defaults, bankruptcies, and other clear signs that the financial system is deteriorating, massive fiscal stimulus efforts will be launched. These will likely push in opposite and contradictory directions. For example, massive public works projects will likely include capital expansion of transportation infrastructure because these are large projects that require many workers and lots of fossil fuel energy. At the same time, in the name of creating a green energy revolution, government projects to establish utility-scale wind and solar systems will be launched along with expanded subsidies for distributed renewable energy. This will likewise result in a short-term demand for fossil fuel energy and workers to manufacture and install new equipment.

Unfortunately, these programs will be unable to build a parallel energy distribution system that replaces our current fossil fuel network, and they will only be able to function for a short time under current models of finance. As the monetary system collapses under the weight of debt, governments will assume a more prominent role in the economy and in managing the daily lives and behaviors of citizens. Desperate times will justify continued expansion of police powers and surveillance of society; security apparatuses put in place by the CIA, NSA, DHS, and other federal agencies will effectively become turnkey authoritarianism where the existing “internet of things” manages behavior, especially financial transactions and political and activist activity.

Amidst the turmoil caused by this “second great recession” or whatever the media brands it, hostilities and war will become more frequent and intense at the periphery of the developed world. Acts of violence in developed countries will continue to be linked to outside conflicts and a war of civilizations, justifying further attempts to control internal movement, financial, and political activity. The current immigration crisis from Middle Eastern countries will accelerate, and social conflict in receiving European nations will escalate and become violent. Across the globe, nationalist sentiment will grow and become politically dominant as borders close and forcible expulsion of non-nationals begins. Tension between the major powers (US, Russia, China) will grow and proxy wars will expand in the war-torn equatorial regions.

Problems of migration and refugees will be exacerbated by increasingly long and hot summers, greater drought, famine (especially in the Middle East and Africa), lack of rain, and extreme weather events.

2021-2030: By this time frame, it will be largely apparent that the catastrophe underway is not another recession or depression but a complete collapse of the financial system. More and bigger stimulus programs will be proposed, with varying degrees of effectiveness. Some of them may result in employment or the production of useful goods and services, but others will only further distort economic relationships. Those in positions of power will reap huge profits from government programs and contracts, tax incentives, and central bank stimulus measures while the common person’s quality of life continues to erode. Eventually, “green energy” projects are abandoned as environmental concerns become secondary to more important tasks such as keeping the electricity on and the mines producing. Economic indicators like GDP are negative year after year, and markets for stocks, bonds, and other financial instruments enter free-fall and cease to function.

Eventually, the banking system will no longer be able to function in a meaningful way and the movement of money will cease. This could manifest itself in bouts of hyperinflation, or severe deflation, or combinations of the two among different asset classes and in different geographic areas. Without a functioning financial system, commercial collapse will accelerate quickly as the remaining businesses are no longer able to operate, even in the developed western countries. Companies kept afloat by government contracts and direct subsidy will be the last remaining actors in the economy as we currently know it. At this point the role of government will be greatly expanded as the sole provider of many goods and services currently provided by private industry. Governmental leaders will also live in fear of losing their authority and ability to exercise control, resulting in a ratcheting up of social controls to the point of outright martial law.

Immigration will reach a fever pitch as citizens of the countries most ravaged by years of war and economic collapse flee across borders into perceived safer areas. Militaries will be deployed to control migration, and when control is no longer possible, military force will be applied against civilians in order to stem the flow of immigrants.

Somewhere in this timeframe, the progress of collapse transitions from mere commercial collapse into outright political collapse. Most less-developed countries will cease to be governed in any meaningful way. Military leaders will conduct coups and form factions that fight among one another for resources in an attempt to gain control over territory and population. The major world powers will lead outright invasions of adjacent countries in order to assert security in their arenas.

This is probably the most dangerous time period for the potential of large-scale warfare to eliminate all of humanity. While economic conditions have deteriorated to a point of desperation, large militarized political organizations are still driving events on the global stage. It seems likely that this must culminate in direct warfare between the major powers, and that inevitably this would result in some exchange of nuclear weapons. If this occurs at a late stage in the process of collapse, it is possible that attacks will lack coordination and the window of opportunity for complete nuclear Armageddon will pass. Orlov’s proposed scenario, where targeted strikes from both sides destroy military and industrial capabilities, also seems highly plausible. In any case, if humanity survives the confrontation of world powers, the outcome will likely be a dramatic acceleration of all forms of collapse as remaining infrastructure is destroyed or becomes inoperable, and military forces are fragmented or incapacitated.

On the ground conditions during this period will vary greatly. Outside of the developed countries in Eurasia and North America, the stages of collapse will be much more advanced as complete lack of organized governance takes hold. Within the developed countries, riots and fighting for resources within population centers will be common. Wide spread hunger and homelessness will take hold of the populations, who are primarily occupied with attempting to feed their families, or in the service of military, police, or paramilitary/revolutionary fighting organizations. Large cities in particular will begin to empty as the population density and lack of services leads to exponentially greater violence and declining health and sanitation conditions. Some social structures may continue to operate either independently or at the direction of military government, but clan/gang conflict, looting, and stealing will become widespread. Some areas will retain public services like electricity, natural gas, and potable water for longer, while some areas may see these quickly disappear. In the lack of these basics, conditions will deteriorate more rapidly and become increasingly violent. Total population will fall as deaths far exceed births, with urban centers leading the trend.2031-2050:

Finally, under the weight of constant war and lack of a secure and stable economy, the remaining nation-states will become ungovernable and will split into factions of military leaders attempting to secure geographic areas of various sizes. Large swaths of territory in formerly developed countries will completely lack any form of central authority and citizens will be left to their own devices. As the final political institutions of the first world devolve into warlord states and anarchy, social collapse sets in.

For many, the story ends here. Basic resources such as food and clean water are scarce and precious, and there is no room for the support system that currently keeps large parts of the population alive. It sounds terrible, but there will be no support for the disabled and ill. People who rely on mobility devices or life-saving medication will not live past this time period. Diabetics will go without insulin, there will be no antibiotics to stave off infections. People who lack supplies, or the capacity to forcibly take them from others, will waste away and starve. Violence defines the daily routine, where the strongest and most ferocious survive while the weak and/or principled suffer severe lack leading to death. Cities become virtual graveyards, while the countryside is dotted with survivors attempting to eke out a living from the land. Unfortunately, even those with the skills and experience to work the earth and provide for their families will be largely unsuccessful, as they are forced to fend off more powerful and aggressive groups looking to exploit their hard work.

Ultimately, even the most powerful warlords will begin to run out of resources to exert control over remaining populations and outright cultural collapse will arrive. With all mines long since shuttered, and all factories long since closed, lack of fuel, electricity, equipment, and even firepower will become too severe to exert force beyond the immediate vicinity. Population will be reduced to a small fraction of the global peak. With small groups of humans now spread thinly across the globe, conflicts are smaller scale, generally individual or group combat in an attempt to take or defend caches of resources. No large scale organization, record keeping, or communication remains.

The impacts of climate change further complicate life for survivors and large parts of the world near the equators become basically uninhabitable. Tropical diseases spread far into the northern latitudes, and the option for groups of survivors to stay in one place is no longer viable. Humanity becomes nomadic, wandering generally northward or southward towards the poles, seeking shelter from extreme weather and enough ecosystem stability to provide sustenance. Along the way, they encounter vast areas of contamination, including the remains of melting nuclear reactors and burning spent fuel ponds.

If humanity and enough ecosystem to support it somehow survive past mid-century, these humans will not resemble the humanity of today. Wild, fierce, and violent- like dominant predators in the wild- they will not have time to keep accurate records of what has happened. Reading, writing, philosophy, mathematics, and all things not directly related to staying alive will be forgotten. They may wonder at the strange ruins, and invent stories about gods and devils and being cast out of paradise. If they survive, within a few generations only myths will remain of our current great experiment in civilization.

Some people would argue that 2016 was the year that the world economy started to come apart, with the passage of Brexit and the election of Donald Trump. Whether or not the “coming apart” process started in 2016, in my opinion we are going to see many more steps in this direction in 2017. Let me explain a few of the things I see.

[1] Many economies have collapsed in the past. The world economy is very close to the turning point where collapse starts in earnest.

The history of previous civilizations rising and eventually collapsing is well documented.(See, for example, Secular Cycles.)

To start a new cycle, a group of people would find a new way of doing things that allowed more food and energy production (for instance, they might add irrigation, or cut down trees for more land for agriculture). For a while, the economy would expand, but eventually a mismatch would arise between resources and population. Either resources would fall too low (perhaps because of erosion or salt deposits in the soil), or population would rise too high relative to resources, or both.

Even as resources per capita began falling, economies would continue to have overhead expenses, such as the need to pay high-level officials and to fund armies. These overhead costs could not easily be reduced, and might, in fact, grow as the government attempted to work around problems. Collapse occurred because, as resources per capita fell (for example, farms shrank in size), the earnings of workers tended to fall. At the same time, the need for taxes to cover what I am calling overhead expenses tended to grow. Tax rates became too high for workers to earn an adequate living, net of taxes. In some cases, workers succumbed to epidemics because of poor diets. Or governments would collapse, from lack of adequate tax revenue to support them.

Our current economy seems to be following a similar pattern. We first used fossil fuels to allow the population to expand, starting about 1800. Things went fairly well until the 1970s, when oil prices started to spike. Several workarounds (globalization, lower interest rates, and more use of debt) allowed the economy to continue to grow. The period since 1970 might be considered a period of “stagflation.” Now the world economy is growing especially slowly. At the same time, we find ourselves with “overhead” that continues to grow (for example, payments to retirees, and repayment of debt with interest). The pattern of past civilizations suggests that our civilization could also collapse.

Historically, economies have taken many years to collapse; I show a range of 20 to 50 years in Figure 1. We really don’t know if collapse would take that long now. Today, we are dependent on an international financial system, an international trade system, electricity, and the availability of oil to make our vehicles operate. It would seem as if this time collapse could come much more quickly.

Our economy is a mystery to almost everyone, including economists. Let me explain the way I see the situation:

(1) The big thing that pulls the economy forward is the time-shifting nature of debt and debt-like instruments.

If we want any kind of specialization, we need some sort of long-term obligation that will make that specialization worthwhile. If one hunter-gatherer specializes in finding flints that will start fires, that hunter-gatherer needs some sort of guarantee that others, who are finding food, will share some of their food with him, so that the group, as a whole, can prosper. Others, who specialize in gathering firewood, or in childcare, also need some kind of guarantee that their efforts will be rewarded.

At first, these obligations were enforced by social norms such as, “If you don’t follow the rules of the group, we will throw you out.” Gradually, reciprocal obligations became more formalized, and included more time shifting, “If you will work for me, I will pay you at the end of the month.” Or, “If you will pay my transportation costs to a land of more opportunity, I will repay you with 10% of my wages for the first five years.” Or, “I will sell you this piece of land, if you will pay me x amount per month for y years.”

In some cases, the loan (or loan-like agreements) takes the form of stock ownership of an enterprise. In this case, the promise is for future dividends, and the possibility of growth in the value of the stock, in return for the use of funds. Even though we generally refer to one type of loan-like agreement as “equity ownership” and the other as “debt,” they have a great deal of similarity. Funds are being provided to the enterprise, with the expectation of greater return in the future.

As another example, governments make promises for future benefits, such as Social Security, healthcare, and payments to the unemployed. These payments are not guaranteed, so are not considered debt. Even without a guarantee, they act in many ways like debt. Citizens plan their lives around these payments, even though they may be reduced or eliminated.

Surprisingly, even “cash” is debt. It is similar to a bond that pays zero interest and has no redemption date; this type of bond can also be easily transferred from person to person. Since cash can be hidden under mattresses, it too can be used as a device for time-shifting.

(2) The big thing that goes wrong in this time-shifting approach to operating the economy is the loss of what I would call an “opportunity gradient.”

As long as the future looks better than the past, it makes sense to make these debt-like obligations. But as soon as the future looks worse than in the present, the whole model falls apart. Even if the future looks exactly the same as the present, there is a problem, because taking on these long-term obligations has some overhead costs, such as administrative costs and a margin to cover the possibility of defaults on loans. These overhead costs need to be paid in some way. Because of this, there needs to be enough of an upward gradient to cover the necessary costs of the loans or the loan-like agreements. (This is part of what makes a Steady State Economy, advocated by many, an absurd idea.)

Once the opportunity gradient becomes negative, it becomes very difficult to get anyone to borrow money and to use the resulting debt to lead the economy forward. When the opportunity gradient becomes negative, young people are less inclined to get married, and tend to have fewer children. International organizations of countries (such as the European Union) have a harder time staying connected. The whole model of cooperation working better than “every country for itself” starts falling apart.

Just as human bodies often go downhill before dying, an economy that finds itself on a downward slope may very well be near collapse.

(3) The loss of an opportunity gradient comes from diminishing returns in many areas, including:

Rising energy extraction costs

Rising costs of mitigating pollution, as increasing resources are extracted and used; these pollution mitigation costs are really part of total extraction costs

Reduced quantity of arable land per person

Reduced fresh water per person, without high-cost treatment such as desalination

Fewer investment opportunities that allow for true growth, such as providing tractors to farmers who previously used draft animals, or adding a new road that permits fast transit across a country for the first time

Many more required “investments” that are simply for the purpose of offsetting deterioration in previously built infrastructure